Debt Recovery – Taking Legal Action
No matter how hard you work to minimise the debts owed, or how well you deal with late payments, bad debts are an unavoidable business reality. Legal action should always be a last resort but when a commercial dispute cannot be settled, litigation is often the only recourse. As solicitors specialising in debt recovery, Fairmont Legal is equipped to deal with the dispute on your behalf, thereby reducing stress and freeing up your time so that you can focus on what is most important – your business.
We can deal with your Debt Recovery Claim on a no win no fee basis with fees being calculated as percentage of what is recovered. You may be required to pay for court fees to issue the claim but this will be explained to you upon initial instruction and at the relevant stage of proceedings. We also offer a fixed fee service, pricing details for which can be found.
If you are successful, the other side has to pay some, but not all, of your costs. If they are not able to pay, you may not be able to recover either the debt or your costs but this is something we will advise you on at the outset.
Step 1 – LBA
We will always commence action by issuing a formal Letter Before Action (‘LBA’). This is a formal demand for payment setting out the full amount claimed, plus interest and puts the debtor on notice that if payment is not made within 14 days, County Court proceedings will be instigated. Alternatively, if the debt is worth more than £750, a statutory demand may be issued with a view to asking the court to wind up the debtor’s business, or make an individual bankrupt. If the debtor is an individual or a sole-trader, the process differs slightly in that the LBA has to be issued in accordance with the pre-action protocol which came into effect in October 2017.
If this does not result in a recovery, we will issue the County Court claim which is often done online to expedite matters.
Step 2 – Court
Once a claim has been issued, the debtor, or for the purpose of the legal proceedings ‘the Defendant’, has 14 days in which to acknowledge the claim and a further 14 days to file an admission or a defence.
The County Court has jurisdiction to hear most debt claims but cases are allocated to ‘tracks’ based on the value. Cases are allocated to small claims track (claims of up to £10,000), the fast track (£10,001 to £25,000, or the multi track (more than £25,000). How the claim will progress and the length of time it will take will depend on which track the claim has been allocated to.
If the Defendant fails to respond, we will obtain Judgment in Default and take enforcement action to recover the debt.
Step 3 – Enforcement
Once we have obtained judgement and if the Defendant/Debtor still refuses to pay, we will write to demand payment and discuss the options available to you to enforce the judgement debt. We will advise you on the best method specific to your case and guide you the the best solution in order to recover the debt.
The decision of whether or not to issue County Court proceedings should not be taken lightly. No matter how watertight you believe your case to be, a successful outcome is never a guarantee. Fairmont Legal will weigh up the evidence, the facts of the case and conduct searches and enquiries in order to advise you as to the viability of issuing proceedings. You will be advised as to whether the likelihood of success justifies the expense and risk of going to court.
Litigation is time consuming and stressful but once you instruct us to take conduct of the matter, you will not only be handing over the case but the stress associated with court so you can ensure that your business does not suffer.
Contact Fairmont Legal’s Debt Recovery team for a FREE initial consultation. We can discuss the options available to you. Please 01204 866597 or email firstname.lastname@example.org.